The 5 Functions of Leadership

In this episode of Culture by Design, Tim and Junior explain the 5 Functions of Leadership, originally created to provide a job description for a CEO. When you're an executive leader, nothing is your job and everything is your job. Delegated authority is hard to find success in, but this episode will help you better understand how to be effective in any leadership role.

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Episode Show Notes

In this episode of Culture by Design, Tim and Junior explain the 5 Functions of Leadership, originally created to provide a job description for a CEO. When you're an executive leader, nothing is your job and everything is your job. Delegated authority is hard to find success in, but this episode will help you better understand how to be effective in any leadership role.

Function 1: Vision & Strategy (07:26)

Vision and strategy represent the direction of an organization. Inherent in the leader’s role is the commission to give the organization sight by painting a portrait of the future and inspiring others toward it. The essence of strategy is the deliberate reduction of alternatives to determine how value will be created. To achieve the vision, leaders need to apply strategy principles to achieve competitive advantage.

Reflection Question: How are YOU doing painting the vision?

Function 2: Alignment & Execution (19:56)

To align an organization is to load-balance and pace the organization, and then cognitively and emotionally prepare people to achieve the vision and execute the strategy based on specific goals. Through alignment and execution, leaders convert vision into plans and plans into concrete activity. They merge priorities, plans, incentives, expectations, and measures to get desired results.

The 5 Alignment Questions

  1. What are your concerns? Don’t ask people if they have concerns—of course they do. So let’s get them on the table and discuss them.
  2. In your view, why are we doing this? You need to check understanding, which you can only do if your people explain where you’re going and why, back to you. They need to teach it back.
  3. How do you see your role in this? This allows people to see themselves in context and personalize the direction they’ve been given.
  4. What support do you need? Again, it requires the individual to think more carefully through the personal implications of what they’re being asked to do.
  5. And finally, how committed are you to support this direction? This last question assesses the level of commitment; it ties a bow on the whole thing.


Reflection Question: Are you prioritizing until it hurts?

Function 3: Change & Innovation (31:22)

By definition, leaders have a contradictory role. On the one hand, they need to preserve the status quo to create value today. They also have to disturb the status quo to create value tomorrow. Organizations change for three reasons: 1) to achieve higher value, 2) to achieve lower costs, or 3) to ensure compliance with legal, regulatory, and safety requirements. Businesses need change and innovation because competitive advantage isn't promised, it's perishable.  It’s the leader’s role to initiate change and innovation in order to gain, maintain, or reclaim competitive advantage.

Reflection Question: Is my communication as a leader more discovery- or advocacy-based?


Function 4: Talent Acquisition & Development (38:17)

The fourth function is to acquire and develop human capital. Given the transitory nature of competitive advantage, the true source of sustainable competitive advantage is ultimately people. They are the source of ideas and action—the two assets most responsible for organizational performance. Senior leaders must be deeply committed to and engaged in acquiring and developing talent. They are in large measure defined not only by what they do but also by who they leave behind in the leadership pipeline. Leaders who develop a climate of psychological safety and cultivate a high tolerance for candor engage and retain their people at much higher levels than the competition.

Reflection Question: Do you have top talent leaving? Why?


Function 5: Values & Culture (45:46)

Values are the primary ingredient in any culture. Research confirms what we now call the culture formation hypothesis–the modeling behavior of leaders is the central factor in culture formation. Leaders either show the way or get in the way. This central question now becomes: Culture by design or by default? Because intellectual diversity alone produces nothing, a leader’s most important job– second only to setting strategy–is to act in the role of a social architect and nourish a culture in which professed values become de facto values.

Reflection Question: Am I modeling the culture I want to have? What am I doing to create it?

Episode Transcript

0:00:01.9 Producer: Welcome back, culture by design listeners. It's Freddy, one of the producers of the podcast, and today marks the one year anniversary of our first official episode of the podcast, it's amazing because we are now in 100 countries worldwide, with more than half of our listeners outside of the US, where we're based, as we mark the milestone of one year, it's the perfect time to begin a short three-part series on leadership. Today's episode is on the five functions of leadership, and I have to tell you, this framework was extremely useful and has been extremely useful to me personally, in my role as a manager and a leader here at LeaderFactor, we talk about Culture by Design, and a lot about psychological safety here on the podcast. Well, the modeling behavior and patterns of leaders have the biggest impact on those two outcomes, keep that in mind as you stick with us for the next few weeks, as always, will include important links for this episode in the show notes at leaderfactor.com/podcast. Enjoy today's episode on The Five Functions of Leadership.

0:01:17.4 Junior: Welcome back, everyone to culture by design. I'm here with Dr. Tim Clark, and today we'll be discussing the five functions of leadership team. How are you.

0:01:22.9 Tim: Doing great, Junior. This is going to be a very substantive meaty conversation we're gonna have today. So I'm looking forward to this one.

0:01:32.8 Junior: Yeah, that it will. That will... I've been in many meetings, workshops, executive development sessions where we've introduced the five functions, and every time, almost without fail, someone says something to the effect of It all makes sense now, or I finally get it, or I've never seen it put this way before, our goal today is to explain the five functions, which are your five responsibilities as a leader, and we'll invite you to reflect on what you might do to improve each one, so hopefully by the end of our discussion today, you'll have identified at least one thing you can do to become a more effective leader. So Tim, where did this come from? Any genesis story or context you'd like to share...

0:02:15.8 Tim: Yeah, there's a back story. It goes back a lot of years when I first started working with CEOS. Let me think about this, you're elevated to become the CEO, and you're looking around and you're asking a question, can someone give me a job description, please, what kind of answer you gonna get when you ask for a job description when you're the newly appointed CEO... Crickets, there's no obscurity for a CEO. And so I think I've worked with maybe about three... I think we're over 300 CEOS now, and so this framework was originally created to provide a job description to the CEO, because when you're a CEO, you get up in the morning, what do you do? Well, you could go in a thousand different directions. Everything is your job, which means nothing is your job, how do you prioritize, how do you frame your role, how do you even begin to approach your role, because it includes everything, everybody reports to you, everything is your responsibility, but you just delegate it so everyone is working through delegated authority. Based on your leadership. So how do you approach it? Well, that's the genesis for this framework, now we call it the five functions of leadership, but it really describes the broad contours of the CEO'S role, but then everyone below the CEO can also use this framework to better understand their stewardship and how to be effective.

0:03:58.9 Tim: So that's what it is, Junior, that's where it came from. It's an attempt to say, Here's a job description for the CEO.

0:04:06.1 Junior: I think it's also worth calling out that there's not a piece of the job description inside most leadership roles that talks about leadership or what are my managerial responsibilities when it comes to these components, values and culture or alignment, you just have some pretty tactical bullet points of this is the role. And so when it comes to leadership, I think that that ambiguity, that fog exists at not just the level of the CEO, but almost any leadership role, the leadership component of your role often seems mysterious to people, especially when you've got a first-time leader, they're bumped up from individual contributor and now they're in a managerial role, they have responsibility for a team, and now their contribution moves from less direct contribution to more indirect contribution, in that ratio continues to change as you move up the hierarchy. So for some people, by the time you reach the top, as you're talking about your contribution is almost completely indirect and strategic and strategic.

0:05:14.0 Tim: Junior... Here's what happens to a lot of people. They work in an organization, they work hard, they learn, they grow, they develop, they contribute, they do good work, and then the organization taps them on the shoulder one day and says, Hey, we want you to think and contribute strategically, and you say, Great, I would love to do that. How do I do that? And we all realize that they have been trained to be tactical, they have been trained to perform at a task level, and they're good at it, but they don't know how to contribute strategically, they would like to, but the organization has not asked them to do that, so many organizations are so deficient in this area, we don't systematically train people how to do that, right. I saw this even yesterday in a client call with a very well-known organization, and part of the issue that arose is they're helping me understand, Look, we're promoting these technical experts that have been individual contributors for ever, and then we put them in a role that relies not on their technical expertise, but on management skill and strategy, and this probably isn't a surprise for many of you listening, we rarely support this transition the way that we should, we expect people to figure it out...

0:06:42.1 Tim: Some people do figure it out. Some people don't, and for those who don't, the long-term effects on the organization can be very deep and very negative, and then they just perpetuate.

0:06:51.2 Junior: And we continue this cycle of hiring the highest performing individual contributor that's performing a technical role. So for those who are just barely starting out on their management journey, let's say that you just moved from that situation of individual contributor to now a position of leadership, or for those who are close to the top of the hierarchy and have been there for decades, we hold that the five functions framework helps you take your leadership to the next level, and for those of you and learning or training roles in your organization, maybe this will spark a few ideas that you can take to your organization. So let's start off with number one, which is vision and strategy, speaking of strategy, vision, a strategy represent the direction of an organization, its trajectory, its path, it's future, and inherent in the leader's role is the commission, as it were, to paint a portrait of the future and inspire other people toward that portrait with vision, leaders are able to draw out the discretionary efforts of their people, and then with strategy, they determine how to achieve that vision, so you've got vision at the very top, you have strategy as your implementation plan, and I really love starting here with vision and strategy, because without this, we have nothing, and that's true of many of these five functions, but vision as the ultimate economy of scale.

0:08:15.0 Junior: Tim, you've talked about that before. What does that mean?

0:08:17.3 Tim: Well, first of all, let's distinguish a little bit more between vision and strategy, vision is the future state, the seedling of reality, that portrait that we see in the offing... That's the vision, and as you said, the strategy is the plan to get there, how do we get there? Taken together, those two elements, vision and strategy represent direction, as you said, Vision is the ultimate economy of scale, now you gotta think about that, we're applying an economic principle to vision. How is the ultimate economy of scale? Because think about what it does, if you have a good, clean, clear vision, it lowers the unit costs for everyone and making decisions, because we have a reference, we know where we're going, we're all going there together. Now, there are many, many, many things that we have to figure out to get there, but it literally reduces the unit costs of making decisions to get there, so think about the efficiency that a good vision creates. It's absolutely amazing. Now remember to get there. That's our strategy. What is a strategy? Well, as the strategy is a set of mutually reinforcing decisions, well, we all have to understand that together, we're gonna figure a lot of it out as we go, but at least we have that vision out in front of us, so think about the efficiency that that creates think about what that does to the organization, I don't think a lot of people have ever looked at it this way.

0:09:57.7 Junior: Part of what strikes me inside vision and strategy is the concept of discretionary effort, so each person inside your organization, you include it has the spectrum of effort, you can give minimum requirements in order to achieve the objective and just stay in there doing what you do all the way to full effort, discretionary effort, and inherent in that is your discretion, you're choosing to give this extra bit... It's not required of you. It's given of your own volition, so how do we tap into that with people, the vision is what taps into that. So I wanted to share a story, Tim, one that I like a lot about this, about the why about purpose. And this story is about three brick layers, perhaps you've heard it, it has several variations, but it is rooted in a true, authentic story, so after the great fire of 1666... So several hundred years ago, that leveled London, the world's most famous architect of the time was Christopher Ren. He was commissioned to rebuild St. Paul's Cathedral, he also designed the Sheldon and theater at Oxford. So Tim, you may have seen that or been there.

0:11:15.2 Tim: That's where I graduated to building.

0:11:17.8 Junior: In that building, agnihotri. Amazing. One day in 1671, a few years after the fire, Christopher ran observed three brick layers on a scaffold, one crouch one half, standing in one, standing tall, working very hard and fast to the first brick layer, Christopher ran asked the question, What are you doing? To which the bricklayer replied, I'm a brick layer. I'm working hard, laying bricks to feed my family, the second brick layer responded, I'm a builder, I'm building a wall, but the third brick layer, the most productive of the three in the future leader of the group when asked the question, What are you doing... Replied, with a gleam in his eye, I'm a cathedral builder. I'm building a great Cathedral to the Almighty. So the three... We're doing the same job. They were doing the same motion, they were doing the same mechanics, but they were looking at it, they were approaching it in three different ways, The first... The way that I see this, he's approaching it as a job, the task level, I need to put this brick here and I need to do it over and over again, and that's what I do every day.

0:12:29.2 Junior: The second looked at it as an occupation, I'm a builder, and the third looked at it in what I would call as a calling, some people call it purpose, some people call it calling, a lot of different things that you can put here, but this strikes me because it's our responsibility as leaders to paint the vision of the cathedral and to help people understand that they're not brick layers, they're not builders, their cathedral builders, and the cathedral builder philosophy... I love this piece, it didn't live just at the level of the architect, the architect wasn't the only one who's like... I'm a cathedral builder, so regardless of the prestige of your role in this case, you're just stacking bricks, you can find meaning and purpose, and you can find meaning and purpose even in the most menial of tasks, and so that discretionary effort comes when... Okay, there's a little mistake here, or there's an opportunity here to do this a little bit differently, and when you're looking at it through the lens of building a cathedral, you'll probably go to that next little piece of effort to move this brick slightly here or to ask a question about, Should we do this differently? Whereas, if you're approaching it from a task perspective, you're just gonna lay those bricks, and if someone says that something's wrong, so be it, you keep laying your bricks and that's it.

0:13:51.1 Tim: So that's a vision, that's one of the stories that helps me understand vision or illustrates... Thank you for sharing that. That's an incredible story, and it illustrates the distinction between the intellectual side of a vision and the emotional and inspirational side of a vision, the intellectual side is very important because we really do need to know that if this is our current state, what our future state looks like, but there's got to be some inspiration there too, and this illustrates the awesome power and the pull of a compelling vision to animate people and propel them toward the vision. That's why we need a vision, and we're gonna talk about strategy next, but just the awesome power of putting a compelling vision in front of people, they linked themselves to the vision and they are now doing meaningful work.

0:14:54.4 Junior: So one of the questions we can always ask ourselves is, How are we doing here, and we'll have some reflection questions throughout conversation, but that's one of the first ones I would put in here is, How are you doing painting the vision? Because if you're not doing well, it may be that your people are looking at this as a job or occupation, but to get to that next level, we need to paint the picture, so let's talk strategy for a moment. Strategy is mortal in the sense that it changes constantly, some strategies live, some strategies die, but strategy has a timeline, it's not that you can set out strategy the same way you lay out vision and just lean on that forever, right?

0:15:39.7 Tim: It's really true, Junior, because the very nature of competitive advantage is that it's perishable, it's like ice, it's always melting, and the more dynamic the market that you're working in, the shorter the span of that competitive advantage... It's on an amortization schedule. It's melting. The only question is the rate of the melt... It's all perishable. It's all melting.

0:16:05.6 Junior: I also wanna call out inside strategy, that strategy is the deliberate reduction of alternatives, and so when we're talking about the five functions and our role when it comes to strategy, one of the ways that you can understand or see if you're doing well or if you're doing poorly, as if you're saying no to more things than you're saying Yes, strategy is way more about saying no, and that it is saying yes. And so that's a litmus test for you, what's your ratio of nose to yes, as if the yeses are out weighing the nose, chances are you're proliferating too much, you're doing too many things, and you need to rein it back in, you need to focus and apply serious leverage. And so I've been thinking about that a lot lately, and I've seen that play out inside organizations, inside my own role over time, is that ratio needs to be more Nos than... Yeses. So a couple of questions as we wrap up this section. Number one, vision and strategy, when was the last time you had a meeting about vision? That's an interesting one. Ask yourself, have you ever had a meeting just about vision.

0:17:14.3 Tim: And ask yourself Junior as you're asking that question, you may have a vision. Is it any good?

0:17:19.2 Junior: Yeah, is it compelling?

0:17:20.7 Tim: Is it powerful? Is it rocket fuel to the members of the organization? Do they care about it? And do you know what the diagnostic question here is, do people talk about it? Does it ever come up in conversation? Do people actually articulate the vision, do they share... Do they pass it on? IT, I know in a lot of organizations, people... That's the last thing people talk about. I don't even know what it is. Yeah, so that's a great question.

0:17:44.7 Junior: The next question is, and this is along the same line, could each one of your people express the vision to their peers with the level of detail that you would hope... Do they feel it in their bones? Or do they think that the vision is just words, are your actions congruent with the vision... Here's another one that I was thinking about just this morning, do you pass along the vision you heard from up the chain and just regurgitate it, because if you do, people can tell. And so you have to ask yourself, Am I bought into a vision... Am I bought into the vision of the organization, the department? Do I have that vision attached to the objectives, because if you don't, then you'll miss out on that visceral feeling that should be attached to the vision, and it should be that it should be visceral, it should radiate from you as you behave, because if it's just words people feel that, they see it, and next time you talk about vision, they'll say, Yeah, whatever.

0:18:49.4 Tim: Junior... I would even say this, if your vision is complicated, you don't have one... Here's the litmus test for a vision, and this may sound a little extreme, but the litmus test for vision is that you assume illiteracy and oral tradition, you assume that people can't read in the only way they can pass the vision and communicate it is through oral tradition, it has to come from your mouth to my ear, and it needs to be coherent, it needs to be consistent, it needs to be something that I can pass on. And it will remain intact. Otherwise, I would say you don't really have a vision, because if I can't understand it, if I can't grasp it and if I can't pass it on with clarity and consistency, how in the world can the organization and align behind that? That's not gonna happen. So I would say you don't have a vision if it's complicated and you can't communicate it to others that way, love that is a perfect segue into number two, which is alignment and execution, alignment, execution, represent getting things done, it's too cognitively and emotionally prepare people to achieve that vision and strategy that we just laid out based on specific goals, we need to consolidate institutional commitment by emerging priorities, plans and Santa's expectations and measures through alignment execution, we convert this vision into plans and then planned into concrete activity, so we're dropping down yet another level into activity.

0:20:33.1 Junior: So let's talk a little bit about paying and load balancing, you've used this word before with leaders to him load balancing. And I'd like to just dive into that for a moment. What do you mean by load balance?

0:20:46.4 Tim: Well, you only have so much capacity in the organization to execute, and you've gotta make sure that you spread that capacity across your priorities in the right way, if you have too many priorities, then you don't have the focus that you need, and you're not going to be able to execute as well as you could because your efforts are diluted, so you've got to establish your priorities based on strategy... What did we say? Strategy is the deliberate reduction of alternatives, it's about making trade-offs, it's about allocating scarce resources in the most appropriate and intelligent way, if you've done that, then you load balance your organization's capacity to execute based on those priorities. That's how you do it.

0:21:39.2 Junior: And inherent in that comment is that you are dictating the priorities, which means you're assessing all optionality, you're looking at all of the pads and you're saying Not this one, this one, not this one, this one, this one, now it... So we have to choose amongst the activities, and then we need to choose order and priority, and so those are the things that we're using to sift through all of these options because there will be tremendous options, and then we say, Okay, based on this, based on the information that we have, this is the path we're going to go down, and this reinforces the strategy this way, in helping us achieve our vision this way, if you don't make that decision upfront and help just what would the appropriate word be If you don't focus... Then your people will go and they'll do all sorts of things that may not be reinforcing that strategy, that may not be reinforcing that vision, so that's why I wanna start with load balancing when it comes to alignment execution, because that seems to be the first thing we need to do...

0:22:44.1 Tim: Let me add a comment, Junior, so for all of our listeners, you may think, Oh yeah, we've got our vision, we've got our strategy, we've better priorities, let's go... Let me push you a little bit on your priorities, let me push you by saying this, you need to prioritize until it hurts, you need to prioritize until you are saying no to really good, really brilliant ideas. That's the kind of triage. We're talking about if you've just traded off ideas that aren't that good, that may not have a lot of potential, you're not there yet, you have to go all the way until it hurts to make those final trade-off ideas because you're saying no to some of those that you know are winners. That's the kind of prioritization that we're talking about, it's gotta go all the way all the way down until you know that you've landed on a small set of critical things that you're going to drive and everything else takes a back seat, that's the kind of triage of trade-offs that we're talking about.

0:24:04.8 Junior: To go back to strategy for a second, one of the words that I've heard a company strategy that I like the very, very most is angst. That's when you know that you're doing it right. Is it right? Yeah, if it's pleasant and it's straight forward, you're probably not doing it right, there should be angst that accompanies that process of whittling down your list of things to do and choosing very specific things to do. I love that. So I wanna go through briefly the five alignment questions, so this is gonna be tactical for a moment to give you something very practical that you can implement around alignment.

0:24:42.7 Tim: Before you jump into the questions. Let me just mention this because I think a lot of organizations struggle. They think, Oh, we have our vision and our strategy, let's go execute, let's go execute, and they're not fully acknowledging and valuing this intermediate step that we call alignment that lives between strategy and execution, so many organizations, they leap into execution, they just go head long into execution, as soon as they have their strategy and they're not respecting the way that organizations behave and the crucial requirement to align the organization behind the vision and the strategy, then we can go to work, or they'll say, Oh, we have an alignment step.

0:25:40.0 Junior: But their alignment tab looks like this is everybody good. Everybody good? Thumbs up. Okay. Yeah. Ready to go for the next step. Does anyone have any concerns and... No. Okay, great. We're good to go.

0:25:57.7 Tim: I'm not at the head. Means alignment. Yeah.

0:26:01.3 Junior: Does not. Very dangerous, it's very dangerous. So to avoid that, to place in this intermediate step and to do it effectively, we have the five alignment questions, the first one is, what are your concerns? So notice how we phrase that, not do you have any... The assumption is that you do and what are... Let's get them on the table and discuss them almost never. Will you have zero concern, so we wanna bring that out and we wanna talk about the number two in your view, as you're asking people, why are we doing this? So you're checking understanding, which you can only do if people explain it back to you, they need to teach it back, in your view, why are we doing this? Number three how do you see your role in this? So this helps people see themselves in the context of whatever it is we're about to go and execute and personalize this direction that we've given them, so we may roll out some broad set of things that we wanna execute on, but for this specific person, what does it mean, they need to be able to see themselves in it. They need to be able to see their contribution, and if we don't have that step, sometimes we can lose people.

0:27:17.7 Junior: Number four, What do you need? So this requires people to think carefully through the implications of what it is we're going to go and do, and maybe they don't have the resources necessary to do what we're asking them to do, or maybe we need to re-allocate, maybe we need to load balance, maybe they say, Hey, I know that two weeks ago we talked about this other thing that was a priority at that time. Is that something that we still need to do, or is this all hands on deck, and so you're helping them through that process, because if you just say, Well, this is just the priority, we're gonna go and do it, then maybe there's a ball that's gonna get dropped that we didn't address. And so part of what I wanna emphasize here, that is the cadence of prioritization, the cadence of prioritization for me lives at the half day, and I'm not even kidding, I'm re-prioritizing at the beginning of my day and halfway through the day, I'm not prioritizing once a month or once a week, and yes, we have vision and strategy, and we have the big rocks and big objectives, but when it comes down to the day-to-day, this is something that's happening all the time.

0:28:30.5 Junior: So if you're not helping your people manage the priorities on that type of a cadence, how do you need to check in every couple of hours, but at least a couple of times a week, at least, if it's just all there, we have one team meeting on Monday, and we let people go do thing for five days, and then we come back the following Monday in today's environment, it's too dynamic.

0:28:52.0 Tim: So alignment, Junior alignment for you, gets very tactical on a daily basis, and you're saying you gotta check alignment at least twice a day.

0:29:00.6 Junior: Oh yeah, at least with myself, that's what I looming at my own priorities constantly.

0:29:06.1 Tim: Yeah, because what you're after is line of sight between you... And the vision and the strategy of the organization. Yeah, that's what you're saying. Let me add a couple of points that kinda summarize, alignment as this intermediary step before we begin to execute, the first one is that alignment is a combination of understanding and commitment, it's both, it's, do you understand and are you committed for the journey? It's those two things coming together. And number two, 'cause you've already explained in many organizations, alignment is a Sumi, we assume that people are aligned or maybe we get a head nod, it's a step that's incredibly dangerous.

0:29:55.3 Junior: So the fifth question has to do with commitment, finally, how committed are you to support this direction... Again, notice the phrasing, not, are you committed to support this direction, how committed are you to supporting this direction, and if we don't assess the level of commitment and we're just looking at understanding, it's not going to be enough, 'cause people may go out the door, they may understand perfectly well what we're asking them to do, but then not be committed to that direction, and that's gonna suffer, or the performance will suffer and the execution will suffer. So here's my invitation, or I guess the reflection question is, do you have a pattern of asking, Are we aligned? 'cause I hear that so often, so often in organizations, are we aligned? If that's the question that you're asking, then we have some work to do, and I would encourage you to use these five questions, and people aren't... You don't need to have these memorized, it doesn't need to seem terribly fluid, even if you have a page out with these five questions on them and you go through them with your team, it's... Okay, that's great. Yeah, that's what...

0:31:02.7 Junior: People will appreciate that.

0:31:04.6 Tim: Yeah, but just going back to what you said, Junior, when people ask, leaders ask, Are we aligned and people... They know their heads, yes, that's a false positive. So often.

0:31:16.1 Junior: It is. Okay, so that's number two. Alignment and execution. Next we go to number three, change and innovation. Tim, why do you put change in innovation together?

0:31:28.5 Tim: Change in innovation represent the adaptive capacity of the organization together. So as an organization, you have a strategy, well, you have a vision, you have a strategy, we align, we go execute, then what happens is that we have an encounter with reality, and that encounter with reality will always require that we make some adjustments. We're going to need to change and we're going to need to innovate to maintain our competitive advantage, so this is our adaptive capacity as we move down the road, and we're executing a strategy, we will confront three different kinds of adaptive challenges that will inevitably come our way, number one, there will be opportunities, new opportunities that appear that we need to try to exploit, number two, there will be threats, threats that put our competitive advantage perhaps in jeopardy or could, so there will be threats to come along the way, and then third, once in a while there will be a crisis, hopefully those are rare occurrences, but they do happen, so these three categories of adaptive challenge, the opportunity, the thread in the crisis, this is what we do, we respond to these adaptive challenges with change and innovation, so we need adaptive capacity in the organization, we know this is gonna happen, we just prepare for the arrival of these three categories of adaptive challenge, we've gotta be ready to go.

0:33:13.0 Junior: And it speaks to a few different things, one is that you can't just lean on a five-year strategic plan and think you're gonna go and execute that over the next five years... Oh, wow, right. Yeah, but we still see that, not that you shouldn't have some longer term goals on some longer-term strategy, but you're kidding yourself if you think that it's not gonna be... Almost completely different by the time you get there. That's right. So there's this dichotomy, it's somewhat paradoxical, we're being asked to execute and then we're being asked to innovate, so these two things work against each other on a day-to-day basis, so we have these priorities that we've determined, we're executing, but then we're also being asked to change, and sometimes the way that you put this, Tom, as we're being asked to preserve the status quo on one hand, so that we can deliver value today, but then we're also being asked to disturb the status quo so that we can provide value tomorrow. Those are contradictory things, so you don't wanna just do exactly as you thought you were going to do with no change, and you also don't wanna blow it up and start from zero, so...

0:34:22.3 Junior: Am I seeing that right? Time, help me understand this.

0:34:26.5 Tim: Is it difficult? It's very difficult, it illustrates the natural tension state that exists between the applied discipline of management and the applied discipline of leadership, so think about that because on the one hand, as you say, You've gotta preserve the status quo to deliver value today, on the other hand, you need to disturb the status quo in order to deliver value tomorrow, and what's your role is it to do the management or the leadership... Is it to do the preserving or is it to do the disturbing... And the answer is yes. Now you straddle leadership and management, those two applied disciplines. That's what makes it so difficult. So challenging.

0:35:11.2 Junior: It's very difficult to do that well, and that's part of the addition to your role as you become more strategic and as you move up the hierarchy, not the moving up the hierarchy is the goal, but it is part of the reality as you get different roles inside the organization is you're going to be much more concerned about the innovation side than you perhaps were in the past, because maybe that brick layer at the very beginning, just like there's no innovation here, this is just... I put one brick here and I put bricks over here and then I go home, but... Yeah, but Junior to your point, to your story, but the brick layer that said, Well, I'm building a cathedral, that brick layer may be looking at it differently and saying, well, okay, we just laid this course of bricks, maybe we do a soldier Rome next, maybe we incorporate a design element, what if we did this, what we did that, so now we start combining innovation with execution and we start contributing in a little different way of that. The last piece I wanna touch on here inside change in innovation is discovery versus advocacy, and this is something that I think we can all improve on, there's a ratio of our communication between these two things, discovery and advocacy.

0:36:45.5 Junior: And it's very important that we look at this when we're talking about change and innovation, some people think that as you become a leader, that your role becomes more about telling people what to do, it becomes more about having all of the answers. It has more to do with advocating a certain course of action and then getting people to do that, but that's not true, there's an element of that, but if your orientation is pure advocacy or you're just advocating for a certain point of view, then you're doing that really early, that can be a dangerous thing, and you can miss out on opportunities by not participating more in Discovery, discovery question-based, it's open-ended. It has to do much more with your people than it has to do with you, and so that's a reflection question for us here is how much discovery are we doing relative to how much advocating are we doing if we're too much in the advocacy side, that can be dangerous for us in the organization.

0:37:45.1 Tim: One of the things that I see Juniors, I watch leaders mature, is that over time, the best leaders tend to lead more through questions than answers as they progress in their careers, they lead out of a model of inquiry, and it's just fascinating to watch that. Maturation process. That development process.

0:38:11.9 Junior: Okay, so that's... Your third responsibility is changing innovation, your fourth responsibility is talent acquisition and development. This one's interesting, so this fourth function to acquire and develop human capital, given the transitory nature of competitive advantage as we talked about, it's always melting, the true source of sustainable competitive advantage is people, they're the ones who generate ideas, they're the ones who then go and execute so ideas and action, those are the two assets that are responsible for organizational performance, if we don't have both of those, we're not gonna have a sustainable enterprise, we need those two over a long time horizon to do well, so if it comes back to people... And it means it's your job, Tim, whose job is it to acquire and develop talent, everyone... Everyone, everyone, but that's foreign to a lot of folks. Yeah, for some it may not see mom is... And you chuckle when you say it, but a lot of organizations don't understand that, or a lot of leaders don't understand that, they're like, Oh, it's just recruiting. Recruiting does that, you know, recruiting just goes and get the right people and then they just come in and then we execute.

0:39:30.3 Junior: Yeah.

0:39:31.3 Tim: You never stop touching that you're responsible for every aspect of the employee life cycle, and it's just embedded in what you do, it has to be a preoccupation every day. Sometimes people say, Well, my job is to hit the numbers. Yes, your jobs to hit the numbers, but you have at least two pillars and your responsibility to develop people, and then you can hit the numbers, but if you're not developing people constantly, that's going to catch up with you. If you're a leader at any level, you should be able to step out of the way, and I should be able to see a line of leaders that you're developing behind you, that you're mentoring, that you're coaching, that you're developing, this is intrinsic in your role to acquire and develop talent. It's a constant thing.

0:40:38.2 Junior: If you're not doing that, I will call it building bench, then you can find yourself in a really tricky spot, especially given some of the turnover that we've talked about in the past, if you have top talent that's exiting the organization and you're not recruiting, attracting top talent and developing that over time and building that leadership pipeline that so many organizations talk about, then you're gonna find yourself in a difficult place.

0:41:07.2 Junior: So I wanna talk for a second about coaching because this is a huge part of the development process, and there's a tool that we use to assess coach ability, and this is something that I don't think a lot of leaders understand well, and I just wanted to call that out in my scene, slightly tangential, but I think it's valuable for people is there are two things that enable coachable, willingness and self-awareness. And so those are two things that we're looking for in the people that we're trying to develop. And it's just, it's a very quick assessment that we can do to see what's the potential of this person to get better and to develop.

0:41:53.9 Junior: And the reason that I bring this up, even though it might seem tangential, is that we need to load balance ourselves and we need to make sure that we're allocating our own time and energy into the people and developing the people appropriately based on where they are, based on what their potential is, and based on these two criteria, willingness and self-awareness, if you don't have willingness inside of the people, it's gonna be very, very difficult to develop them over time, and so that is a prerequisite for your time and attention, because you don't wanna be sinking that as a leader into a place that is not worthwhile. And so I just wanted to touch on that because each of us has a scarce resource and we wanna make sure to allocate it appropriately, and we're looking for those two things when we're looking for talent acquisition and we're looking for development...

0:42:46.2 Tim: It's a powerful diagnostic tool. Junior, you could take, say, you're in a managerial role and you have five direct reports, you can plot each of those direct reports based on those two dimensions that you just mentioned, self-awareness and willingness... Yeah, just take it on a 10-point scale. Take the first individual. How would you rate them for self-awareness? One to 10, how would you rate them for willingness 1 to 10? And then what do you do? You created 2 x 2 matrix and you can plot them in one of four quadrants really, and that becomes, as I said, a very powerful diagnostic to help you understand where your people are and what their likely trajectory is as they move forward and as you try to coach them and develop them.

0:43:39.9 Junior: We call out in the beginning that as you grow as a leader, as your responsibilities increase, your influence becomes less direct and more indirect, so talent acquisition and development is one of the ways that you can scale your influence and get better leverage and have more impact throughout the organization, I think that one of the things that I'm learning and seeing more and more is that it's not enough just to model the behaviors that you wanna see in your team, and I think... Many people feel this way, that if I just show up and I do the job the way that I think the job should be done, and I embody the vision, and I do these things, that people will just see me and they all do the same thing. But as organizations get bigger and as your influence becomes less direct, you can't rely just on your own behavior as an example to be followed, you need to do so through other people and find ways of better leverage and better scale. And I was reading a book the other day that was talking about this, that eventually your visibility goes to zero with certain pieces of the organization as you grow as a leader, where your face time goes down and down and down, where maybe there are people in your team department, geography that see you, five minutes a week.

0:45:10.5 Junior: Or once a year, or whatever the case may be. So how do you influence people? If they only see you for five minutes a week, you have to lean on this talent acquisition and development process so that those get... They permeate throughout the organization, those values, that modeling behavior, and so if you're not doing that, if you're not developing your people intelligently, you can lose that influence, and that's something that I'm really working hard on.

0:45:38.7 Tim: It's a really good point. You gotta become a force, multiplier... Yeah, especially in a large organization.

0:45:44.6 Junior: So that's number four. Number five. This one is arguably the most important, it lives at the intersection of all of these. It's an umbrella for all of these values and culture.

0:45:57.1 Tim: Right in the middle, emits like hub and spokes, and everything is connected to values and culture in the middle, all of the other four functions are connected directly to this function...

0:46:11.4 Junior: I love the visualization because without a hub, the spokes are pretty useless. So this is the fifth in central leadership function, it anchors the other four that values are the things you stand for, they represent enduring free standing, which Tim will talk about, assets that guide behavior and provide a sense of identity. Value shape the culture, which is the set of prevailing norms, attitudes, assumptions and expectations that define the way people work and interact, so... Why does this live Tim in the middle? Why is it so important? And how are these values? Free-standing assets, why you describe them that way.

0:46:55.4 Tim: They're free standing, because they're not dependent on your strategy, the strategy is going to change, your competitive advantage is perishable, but the organization has to determine what it stands for, and those have to be enduring. And so they're free standing and their enduring assets to guide behavior, and they provide the collective sense of identity that we have, so values and culture in the middle of these five functions is the indispensable core. It also provides the soft operating system, it's the DNA for the entire organization. It permeates everything. It influences everything. It's both a cause and an effect.

0:47:46.2 Junior: I love the way that you've put it before that it's social software, so we have all of this hardware inside organizations, we have tools, we have people and skills, but how do all of those component parts interact? How do they work together? How are they informed? They're informed by the software, hardware alone doesn't do anything, it just sits... It needs to be informed by something, and so values and culture as social software makes so much sense to me. If this not glue Blues the wrong word, it's a lubricant, it's an instruction system that tells everything, this is how we interact, this is how this piece interacts with this piece, and this with this... If we don't have that, then the organization will quickly deteriorate, it will quickly become dysfunctional, it will quickly become toxic, and we lose any sort of longevity, and I think that that's an important part when we talk about values and culture... Values and culture are part of what give organizations their longevity, because if you think about, you've got good hardware, you've got good people, and that they're highly skilled, but if they don't work well together, you can light a fire for a little bit, you can push for a quarter, you can get some results, you can ship a product, you can get something out the door and you can have some results, but doing that over and over and over again, over a really long timeline is impossible without values and culture, because that culture will deteriorate too quickly, if left to itself with nothing reinforcing the direction and the things we value.

0:49:35.6 Tim: To your point, Junior culture is a high-maintenance asset, there's nothing low-maintenance about culture, but as leaders, we often tell ourselves soothing stories about culture and that it's going to be really self-executing, when we put it in place that I wish that were true, but it's not. Culture is a high-maintenance asset, it takes constant reinforcement, constant work, it's a living and breathing thing, and it requires your modeling behavior, it requires accountability, it requires communication, it requires constant coaching and mentoring, it requires clear expectations and standards, there's nothing low maintenance about values and culture, and so we shouldn't be telling ourselves.

0:50:29.4 Junior: To said before, the values and culture have a viral nature. Help me understand that what's viral about values and culture, for better or worse.

0:50:40.8 Tim: It's viral because human beings learn primarily through observation by watching and observing the modeling behavior of others, that's primarily how we learn, it's an exaggeration of... Or our mirror neurons. But this is how we learn, we learn through observing and then through imitation. Now, of course, there's gotta be accountability, and as you rightly pointed out earlier, Junior modeling is not enough, it is the single most important factor in culture formation, but we still need accountability to go with it, but it does have that viral quality because of the way that we tend to learn...

0:51:26.1 Junior: And I also wanna point out that there's... The viral quality of culture can act against us, depending on what we're talking about, so if there's any sort of bad behavior, ethical misconduct, those things can scale quickly and become just as viral for worse, just as some of those positive behaviors can become viral for good. And on this note, there's another concept that I wanna call out, which is that organizations will almost always get what they tolerate in another client conversation I was having this week, the client was asking, Why are we not experiencing the change that we wanna see in this area? We were talking about some of the managerial behavior that was going on that they didn't like, and it was pretty simple, there was tolerance for that behavior, and so the organization had learned virally, mind you, very quickly, that if I'm a high performer and I'm a technical expert, then my behavior is irrelevant because the organization will keep me... Because of my skill set. So if I'm good, I get a pass. And so we have this conversation with the client about this in the context of values and culture, and that the accountability mechanism needs to be here, it's not just enough to aspire to these values, it's not enough to just model them, but there needs to be a reinforcing mechanism of accountability that show zero tolerance for any sort of bullying harassment, the things we often talk about, and there needs to be accountability for all the good things that are happening as well, but if we don't have that and we will lose and the organization's culture will unravel is why we talk about culture by design and not by default, is the title of the podcast, if we do it by default, not gonna work well.

0:53:32.2 Tim: No Juniors. So what you're saying is that in this organization, if you're a technical expert, if you have domain expertise in this area, the organization values, that will give you a pass for violations of its profess... The values and culture.

0:53:49.2 Junior: Yeah, and we may slap you on the wrist every once in a long while and say, You know, I don't do that, but like, Okay, then what... And so what de-tolerate you normalize? And that becomes part of the culture.

0:54:04.1 Tim: And then it's perpetuated.

0:54:07.5 Junior: These are our five functions of leadership, and we'll go over them quickly once more, vision and strategy, then we have alignment and execution, change in innovation, talent acquisition and development, and then at the heart, as the hub, values and culture, those five things are our responsibilities as leaders, they're part of each of our job descriptions, they're part of each of our job descriptions, even if we're not at the top of an organization, even if we're not at the middle, you could be an individual contributor, and these things still need to be top of mind because as you get better in these areas, you'll be able to better influence in organizations and just generally... And so we sometimes say that leadership is the aspiration of a lifetime, and these five functions give us some structure, some things that we can go and do to become better leaders, all five of these things should be things that we think about on an ongoing basis. We should be taking inventory inside each of these functions and seeing how are we doing, how am I doing, how is the group doing in this area, and if nothing else, take one of these very tactical tools like the Five alignment questions, take those to your organizations and just see, just see, try it in one meeting and see if you have a better outcome, if you feel more aligned after going through those questions then you did before just looking for head nods.

0:55:41.4 Junior: So this is something that I'm very passionate about. I've seen how this has worked for leaders and organizations around the world, and I think there's a good reason why people are saying, Wow, I've never looked at it this way before. Or it finally clicked for me. There are some things that we can look at to go and become better...

0:56:00.3 Tim: Oh, thanks, Junior. Yeah, I do think it represents the broad contours of the leadership stewardship, and I think that's helpful. So if there's ambiguity about how to perform your role, apply the framework of the five functions, and chances are it will be helpful to you, it will also be a helpful diagnostic because you can evaluate yourself based on each of those functions. So for example, How am I doing with vision and strategy, how am I doing with alignment and execution, how am I doing with change and innovation, how am I doing with talent acquisition and development, and then finally, how am I doing with values and culture? Those are some penetrating questions. And you can't just say, Well, yeah, I'm doing great. Each one of those questions demands a very thoughtful, reflective response, and you could spend a long time trying to answer those questions, and that's exactly what we want you to do is to continue to reflect on those and use those questions, use those functions to propel you forward in your development.

0:57:17.4 Junior: Well, thank you everyone for your time and attention today. We appreciate your listenership. We're very grateful for the work that you do in the world. And we at LeaderFactor are here to support you. You can always reach out to us at leadefactor.com. We appreciate your likes, you're reviewing your shares, if you thought that today's episode would be useful for someone that you know, we would invite you to share it, and we would love to hear your feedback. Just as another note, we just released a new e-book, it's called breaking the chain of command achieving physical safety through psychological safety. It's free on the website. Will link it in the show notes. If you're interested in physical safety and its relationship to psych safety, we would highly recommend that you check that out, so that will wrap up for this episode, and we will see you next time. Thank you.

0:58:17.8 Producer: Hey, Culture by Design listeners. You made it to the end of today's episode thank you again for listening and for making culture something that you do by design and not by default if you've enjoyed today's episode please be so kind to leave us a review it helps us reach a wider audience and accomplish our mission of influencing the world for good at scale today's episode show notes and other relevant resources related to today's topic can be found at leaderfactor.com/resources and with that. We'll see you next episode.

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